What are you investing in?

Originally Posted by mister88

38yr, married, 1 child

- cash 750k <1% yield
- 250k in bond 4% yield
- 1 Sg investment property around 1.5mil 5% yield
- no overseas properties
- 100k in equities / no unit trusts
- no endowment plans (i only buy term)

do share your investment ideas here

Really respect you and your fortune. Based on what you've quoted, you easily have investment worth 2.6mil, which probably required a good 1mil to start with. This, against the number of work years you have so far, you must be one of those traders or other big bucks earners. You starting this thread will make lots of us (or at least me) feels like s**t.

wow so many singapore tycoons surf salary.sg

Originally Posted by Tracker

Thanks for sharing mate,

I will write down my personal views, if you feel otherwise feel free to just point them out. I am here to learn

Also would help if you signed off with a nickname makes it easier to identify you.

Sure, just call me Zhang.

I believe the MRT was also help bring up the value of the area surrounding, from what I know about the MRT location will be in the tanjung puteri area as well near the customs building. I think that is the only location that is 70% confirm, the question is if the MRT will get extended beyond that to benefit the area around which is a question mark. Malaysia being Malaysia hard to say assuming other politicians with difference don’t get involved. But I agree with what you mentioned about getting residential condo around there I believe it will be beneficial as well.


The Nusajaya section is quite interesting with a lot of changes and is easily accessible via the 2nd link, I doubt the MRT lines will really benefit there unless an extension happens. For me a safer play in that area would be commercial (retail) as opposed to residential which has lower rental benefits (compared to the residential with Golf courses etc unless you intend to use it as a holiday house)

That said certain developments near Puteri Harbour is worth a look if the Msia government can really pull off what they say and build an entire city there. (Right now its sort of Barren)

I have concerns about property safety in JB though, hear many stories about either metal gates getting stolen, wires ripped out, illegal occupants etc. Do they have reliable property management firms in Msia? I have doubts about their property maturity for such services.

I was looking into this seriously over the past month. Am inclined to look further into JB Sentral - effectively to bet on the MRT at Tanjung Puteri.

You're right in that it's not confirmed, but this is probably when the arbitrage game is still relevant.

What I gathered from internet sources are as follows (so have to take with a grain of salt):-
- Heads of agreement on MRT link between Singapore and Malaysia agreed at high level in 2010 (together with the land swap)
- Feasibility study for RTS (MRT link) completed and submitted to both governments end Nov 2012
- Results of feasibility study to be announced either Q1 or Q3 2013
- If its a go, detailed planning to proceed in 2014
- If its a go post detailed planning, target completion is 2018 or 2019

So the next question is: how to effect the bet ie via buying a new condo, a resale condo, raw land or landed.

Raw land and landed is out because there is little raw land in the vicinity, and resale landed is apparently very difficult for foreigners to get approval for.

New condos, there are quite a few to look at, and all are being heavily marketed in Singapore i.e. closest to the CIQ (or the MRT location) are Paragon Suites (next to Lion Hotel) and a new development marketed by Norman Sia (which is next to City Square). Both are about RM800 to 1000 psf.

I dug in a bit deeper and found this condo called Orchid View, right next to the CIQ. About 12-yr old, and get this - going for RM350 psf. So am looking into that now.

But a bit frustrating because the sellers have raised the price almost 15% since I started looking at it. Let's see.

M'sia-S'pore Rapid Transit System feasibility study to be ready by end-Nov

A welcome coming together of two sovereign neighbours

Value Investor Research on KLSE Market: Transport: Singapore link to Tanjung Puteri land?

Originally Posted by Tracker

I like KL because the city is growing (Abeit slowly) from the increasing investments and tourism from the region and middle eastern states, also the Singapore government ties getting warmer with Malaysia would definitely benefit the capital. I was looking into the KL Sentral area primarily because of the upgraded rail lines. As a holiday house I find it ideal to take a train to KL and then walk to the condo, also since it’s a transit hub I believe the government would do more to enhance the area (they are already) which would add further enhancement.

Re KL, you brought up several very good points which I entirely concur with. I was thinking about KL pretty seriously as well, especially the Royal Domain place I was telling you about. But at the end of the day, was deterred by the fact that my investment thesis for KL is not as clean as that of JB Sentral i.e. a straightforward MRT bet.

The other considerations are:
- KL is pretty far away, should I need to handle any property logistics
- Prices in KL have actually risen quite a bit and some locals are of the view that price levels are somewhat bubbly
- Hard to figure out exactly where to buy, with so many potential areas to consider i.e. Taman Desa, Mont Kiara, KL Sentral, Cyberjaya etc, so really have to dig down and do pretty intensive research if I'm serious

I'll probably still look at KL at some point in time, but just not as my first Malaysian investment.

I will look into Royal Domain, is there a sales office here you know of? Also check out the sammyboy forum (clean one) a lot of guys there are heavily into Msia investments. They helped me quite abit when I went into Iskandar to take a look.

If you are still keen on Royal Domain, you can check out iproperty.my - there are about 29 pages of ads on it. This is part of the reason I'm somewhat hesitant now - hard to imagine prices going up too much (at least in the near term) when its such a high density development with so many sellers.

Another possible option is Royal Regent, which is phase 3 of the Sri Putramas development (Royal Domain is 2nd phase) - more exclusive and newer, but slightly more expensive.

Condominium for Sale in Sri Putramas III Royal Regent, Jalan Kuching, Kuala Lumpur, Malaysia for RM 580,000

Besides Malaysia there are some Singapore properties one can consider as well, I believe areas along the Thompson line should benefit immensely though it’s a long term play (2019?). Currently my focus is still more on SG then any area, primarily because I am more familiar with the market here and safety factor of course. Lets see if the market corrects or not.

Is your HDB fully paid up? If not you might want to consider paying that up first as it will restrict your investments in SG.

Just my thoughts

In Singapore, I agree with you re Thomson line properties. Other relatively cost effective developments, in my view, are Anchorage (S$1200+ psf for freehold at Queenstown), Aspen Heights ($1400+ psf for 999-yrs at River Valley), Jln Mutiara condos (a few developments in the area going for $1300+ psf for freehold near Great World City, while the opposite Latitude is going for $2200+ psf), and perhaps Avalon ($1700+ psf for freehold near Orange Grove road - next to Shangri-lah).

But post the latest measures, am just going to adopt a wait and see attitude re Singapore properties. My sense is that even if prices do not fall immediately, the new measures have made liquidity in the market considerably tighter (basically locks out PRs and foreigners, and also makes property investment a cash heavy exercise for local investors with one or more outstanding mortgages) and more prone to external shocks.

Good thing there are cheap properties in Malaysia to keep me engaged in the meantime

[erickoh]

Originally Posted by mister88

38yr, married, 1 child

- cash 750k <1% yield
- 250k in bond 4% yield
- 1 Sg investment property around 1.5mil 5% yield
- no overseas properties
- 100k in equities / no unit trusts
- no endowment plans (i only buy term)

do share your investment ideas here

Hi, may I know how do you guys calculate your yield on your property to get 5%?
For me, after I deduct loan interests, taxes and duties, mgmt fees, agent commissions, vacant periods in-between tenants, household maintenance etc, the yield gets so low that it doesnt seem to justify the risk of investment anymore

Originally Posted by erickoh

Hi, may I know how do you guys calculate your yield on your property to get 5%?
For me, after I deduct loan interests, taxes and duties, mgmt fees, agent commissions, vacant periods in-between tenants, household maintenance etc, the yield gets so low that it doesnt seem to justify the risk of investment anymore

Usually it's just rent*12/price.

But I would do it this way:
Take net rental income after all those deductions your mentioned, and divide it by the cash you paid.

I don't think it will be "low".

Originally Posted by Unregistered

Usually it's just rent*12/price.

But I would do it this way:
Take net rental income after all those deductions your mentioned, and divide it by the cash you paid.

I don't think it will be "low".

Try it yourself and tell me what u get?

And try it with normalised interest rate of 3 to 4% then report back... it'll be clear as day.

Numbers don't lie.

You're probably sitting on huge capital gains already. So the puny yields don't matter.

Originally Posted by Unregistered

You're probably sitting on huge capital gains already. So the puny yields don't matter.

As a decision matrix, even if you are sitting on huge capital gains, yields matter.

If yields are puny, and forward prices are not exciting, the easy decision is to sell.

BUT for an investor thinking whether or not to buy, yields matter even more. Question is then whether there is positive carry, and whether such positive carry is sustainable.

A lot of people I know jumped into the market because of slight positive carry (i.e. rental minus (mortgage+monthly maintenance) equals $500-1000 per month). But they forget to factor in vacancy reserve cost, agent fees, repair costs etc.

So they jump into a new project, and now, upon TOP, they find that half the buyers are investors, and there are 500 people all advertising for rental at the same time. And they are left with an unpalatable decision - either leave the place empty for a while or accept less rental, which takes away their positive carry, sometimes bringing them into negative carry situation.

At a time when interest rates are at an all time low and can only go up, and with an unprecedented 200,000 units coming onstream next couple of years with many investor units in its midst, and with the government restricting foreigners, that's a scary proposition.

Does yield matter ? You decide.

Originally Posted by Zhang

Re KL, you brought up several very good points which I entirely concur with. I was thinking about KL pretty seriously as well, especially the Royal Domain place I was telling you about. But at the end of the day, was deterred by the fact that my investment thesis for KL is not as clean as that of JB Sentral i.e. a straightforward MRT bet.

The other considerations are:
- KL is pretty far away, should I need to handle any property logistics
- Prices in KL have actually risen quite a bit and some locals are of the view that price levels are somewhat bubbly
- Hard to figure out exactly where to buy, with so many potential areas to consider i.e. Taman Desa, Mont Kiara, KL Sentral, Cyberjaya etc, so really have to dig down and do pretty intensive research if I'm serious

I'll probably still look at KL at some point in time, but just not as my first Malaysian investment.



If you are still keen on Royal Domain, you can check out iproperty.my - there are about 29 pages of ads on it. This is part of the reason I'm somewhat hesitant now - hard to imagine prices going up too much (at least in the near term) when its such a high density development with so many sellers.

Another possible option is Royal Regent, which is phase 3 of the Sri Putramas development (Royal Domain is 2nd phase) - more exclusive and newer, but slightly more expensive.

Condominium for Sale in Sri Putramas III Royal Regent, Jalan Kuching, Kuala Lumpur, Malaysia for RM 580,000



In Singapore, I agree with you re Thomson line properties. Other relatively cost effective developments, in my view, are Anchorage (S$1200+ psf for freehold at Queenstown), Aspen Heights ($1400+ psf for 999-yrs at River Valley), Jln Mutiara condos (a few developments in the area going for $1300+ psf for freehold near Great World City, while the opposite Latitude is going for $2200+ psf), and perhaps Avalon ($1700+ psf for freehold near Orange Grove road - next to Shangri-lah).

But post the latest measures, am just going to adopt a wait and see attitude re Singapore properties. My sense is that even if prices do not fall immediately, the new measures have made liquidity in the market considerably tighter (basically locks out PRs and foreigners, and also makes property investment a cash heavy exercise for local investors with one or more outstanding mortgages) and more prone to external shocks.

Good thing there are cheap properties in Malaysia to keep me engaged in the meantime

Hi Mr Zhang

Just a word of caution before you plough your hard earn money into investing into Msia esp since theres a lot of media hype being play up on Iskandar Development etc.

Before you even talk about buying a property anywhere in the world. Always always ask yourself what do you intend to buy a property for? Investing eg Flipping, Renting out or for Retiring or Staying?

If you cannot even answer the above question, my advise is take that money and put it elsewhere. Let me share with you some tips on investing (if thats your intention) in Msia esp in Iskandar/Nusajaya:

1) Govt regulations ->
Very fickle, can change every election year today say RM500k restriction on foreign ownership of property, tomorrow is RM 1million. My question to you is DO YOU know the implications for this?

If you had bought at RM500k to satisfy the RM500k restriction which may be a good deal for you, think again, how much do you need to sell it now? RM 1million (if sudden change in ruling) now how many investors will be willing to pay RM 1 million for a second house when they can get a new one at RM 1 million at an even better location with better view.

FYI, the Thomson line to be extended into Johor is still in planning stages. Plans can and will change depending on the mood of the Msia govt.

2) Tenant ->
Forget about renting to local. Why do I say so? Take a look around Iskandar/Nusajaya, besides manufacturing, education hubs, hospitals, theme parks etc are they any big financial institutions or MNC around? If no, next think about the kind of tenants you going to get. Do you think they can pay that kind of sky high rent with their meagre salary?
Oh you may say I can rent to expats then, think again, if you had that in mind, 100 others will also have that in mind, do you think you can get the kind of rental yield you want?

3) Land size
Do you know how big Msia is or even Johor? Now where is the property value when anywhere (as long as govt regulations are met) can be build and promise by developer that this piece of land will be the next paradise. FYI, our dear sinkie govt will not help you in the event your property value tank coz its not their business eg think CLOB in 1998.

Here are 3 tips for you to consider if you are investing, I have more but I am too tired to mention all of them. I am just using Johor as an example. But you may say I am talking about KL, but I can tell you its sama sama even for Penang coz its all under Malaysia.

If you are planning to stay or retire there, it will be a totally different story. Why am I mentioning all these? Reason I dont want to see another so called "investor" lose his shirt or pants again esp after the 1998 Asia Financial Crisis.